£30M Seraphim Capital becomes UK’s first Business Angel-led Enterprise Capital Fund
Seraphim Capital (“Seraphim/the Fund”) announces that it has been appointed by the Department of Trade & Industry (“DTI”) to manage one of the new UK Enterprise Capital Funds (“ECF”).
• Seraphim is the first UK-wide ‘Angel-led’ Enterprise Capital Fund
• The UK regulatory regime was changed to allow ‘Angel-led’ funds to operate without FSA authorization; the other ECFs announced use conventional structures and are regulated
• Unique UK-wide syndicate of leading Business Angel networks and corporate venturers. In the UK alone, Seraphim Capital has access to over 800 investors; the other ECFs already announced are purely regional
• ‘Mentor Capital’ by successful entrepreneurs who are re-cycling returns from their own enterprises
• Seraphim’s US partner promotes inward investment in UK business whilst offering opportunities for SMEs to expand into international markets; this is the first USA Business Angel group to be been involved in an ECF.
Serafim is a new consortium of Business Angel networks and corporate venturers across the UK, led by GLE, which have joined forces to raise £10m private investment, with £20m UK Government backing, to manage one of the new UK Enterprise Capital Funds. The ECF programme is a new multi-million pound scheme set up by the UK Government to boost investment in fast growing small and medium-sized businesses in the UK.
Seraphim’s partners include Business Angel networks from the South East represented by London Business Angels and Pi Capital, Advantage Business Angels in the Midlands, in the North through Entrust and in Scotland through Archangels. The corporate venturers involved are General Capital Venture Finance, The Summit Group and GLE. An exciting dimension to the fund consortium is the addition of funding from New Vantage Group (“NVG”), the USA’s leading Angel Group based in Washington, DC.
Seraphim’s choice of an ‘Angel-led’ structure for its Fund reflects the fact that each investor wishes to be party to the investment decisions, in contrast to most conventional managed fund schemes. Each investor partner has nominated a representative to the Investment Board, which will be directly and actively engaged in making investment decisions on behalf of the Fund.
The Fund, which is based in London, will typically invest with Business Angels in rounds of circa £1m. It will be a UK national generalist fund drawing extensively on the deal flow and investment experience afforded by its diverse private investor base, providing a rich stream of pre-qualified deals selected from the UK’s fast growth companies. Some of these will be proprietary via second or third round funding for deals initially financed regionally by the Business Angel Networks or their associated funds.
‘Mentor capital’ is central to the strategy of the Fund in that each investment will be alongside Business Angels including a ‘lead’ Business Angel. These are typically successful entrepreneurs who are re-cycling returns from their own enterprises whilst adding a degree of experience, expertise and business contacts to aid the growth of the investee company.
The Fund’s reach into international markets is unparalleled with Directors of the Fund including the Chairman of the British Business Angels Association (“BBAA”), the President of the European Business Angels Network (“EBAN”) and the Chairman of the US Angel Capital Association (“ACA”)
Mark Boggett, Investment Director of Seraphim Capital said:
“The launch of Seraphim Capital is excellent news for the UK Business Angel market. It recognises the vital role that experienced Business Angels play in the funding of early stage fast growth companies. Seraphim Capital will substantially increase the equity funding potentially available to early stage companies and help to address the sub £2m ‘equity gap’.”
The Fund plans to start investing over five years from September 2006
The Summit Group